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FASB and IASB chairs discuss global accounting standards

Dec 04, 2012

At the 2012 AICPA National Conference on Current SEC and PCAOB Developments, FASB Chairman Leslie Seidman and IASB Chairman Hans Hoogervorst discussed global accounting standards and the future of IFRSs in the United States and around the world.

Ms. Seidman spoke first, making it clear that she was summarizing her personal views rather than the official position of the FASB or the FAF. She discussed the unique needs of U.S. stakeholders, noting that short time frames and heavy regulations require clear, unambiguous standards. "I don't believe our system can function over the long run with only broad principles," Ms. Seidman noted.

On the topic of convergence, the FASB chairman stated that "a goal of 100 percent comparability (such as a single set) is not achievable in the near term, for very legitimate reasons, in some of the world's largest capital markets." She suggests that the FASB and IASB should complete the MOU projects, and going forward, the Boards should continue to have discussions with other standard setters to improve accounting standards and make IFRSs, U.S. GAAP, and other global accounting standards more comparable. Ms. Seidman advocated for a "less formal approach to convergence," similar to what the IASB and FASB had done in the past, noting that "even though the relationship is bound to change, that does not mean we think convergence is over or that divergence will occur."

In his straight-talking speech, Mr. Hoogervorst noted that IFRSs have enjoyed a strong global impact for many years and that the success of IFRSs does not depend on U.S. convergence. He said that the IASB and the world are looking to the United States for a clear sign of itsintentions with IFRSs and that the U.S. current position for the need of "greater comparability" between the standards will not suffice. He (and the world) expected that the SEC would have made a decision on transition by now. Mr. Hoogervorst made it clear that, in the future, U.S. influence on IFRSs will be "commensurate with its commitment to our standards." He discussed the results of the IFRS Foundation staff analysis that concluded that transition to IFRSs in the United States would be successful.